﻿Replication data and Stata codes for:
 How do we measure trade elasticity for services?


—————— Codes ——————
All (.do) files include the code for replication.
The first part of the code is allocated to data loading and formatting.

* Benchmark Regression (IV)

Estimation of regression equation (3) with instrumental variables. 
The results are presented in the second column (FE(IV)) of Table 1. 



* Benchmark Regression (LS)

Estimation of regression equation (3) without instrumental variables. 
The results are presented in the first column (FE) of Table 1. 


* Search the point of normalization (Optional)

Estimation of regression equation (13) at all t = \theta.
The results (RSS of all regressions) will be displayed for assessment.

* SUR

Estimation of regression equations (13) and (17) for omega and kappa and then for sigma via equation (18).
The results are presented in Table 2.

* FEENSTRA

-Feenstra Method (FM) 

Estimation of regression equation (22) for alpha_1 and alpha_2.
The elasticity (sigma) is evaluated by (23) where sigma = 1 - gamma, by the name sigma1.

-Implicit Instrumental Variables (IIV)
Estimation of regression equation (9) with the implicit instrumental variable, i.e., \hat{\nu}.
The results are presented in Table 5.



—————— Data ——————

All .dta files store panel data (import value and quantity (if any) from country i at time t, along with the exchange rate thereof) in a long format. 
Below we describe the sources of the data.

* Import values and quantities for tangible commodities.

For 11 tangible commodities (coffee, beer, wine, beef, chicken, salmon, blue fish, flat fish, crabs, shrimp, and stones), monthly import value and quantity data from 2008 January to 2022 December were obtained (handpicked) from “Commodity by Country” section of the following website:
https://www.customs.go.jp/toukei/srch/indexe.htm
The HS codes eligible for each tangible commodity are specified in Table 6.


* Import values for services

For services, yearly import value data were obtained from the following website:
https://stats.wto.org

The setup is as follows:
Indicators: Balanced International Trade in Services EBOPS 2010 (2005-2021) - (Analytical data set)
Reporting Economies: Japan
Products/Sectors: Select all
Partner Economies: Select all
Years: Select all
Indicator: Services imports: balanced values (Million US dollar) 



* Exchange rates

Monthly averaged exchange rates were handpicked from the following website:
https://fxtop.com/

The setup is as follows:
Historical rates
1st currency: (choose one)
2nd currency: JPY Japan [Japanese yen]
Start Date: Day: 1; Month: 01-January; Year: 1996
End Date: Day: 31; Month: 12-December; Year: 2020

>> Obtain the Historical exchange rates array <<
  
 
 
 

* Appendix 3
Table 7 (STRI elasticity of import) can be replicated by running 
Estimation2_STRI.do
 
